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Contracts and Market-Exchange in Classical Athens

Edward M. Harris

In his essay “The economy as an instituted process” Polanyi (1957) observed that one of the key requirements for the development of market relations was the transition from economic relations based on status to those based on contract: “It is now possible to say that status or Gemeindschaft dominate where the economy is embedded in non-economic institutions; contractus or Gesellschaft is characteristic of the existence of a motivationally distinct economy in society.” Polanyi’s emphasis on the importance of contracts in market-relations was not original; in the eighteenth century Adam Smith noted that “Commerce and manufactures can seldom flourish long in any state which does not enjoy a regular administration of justice, (. . . ) in which the faith of contracts is not supported by law ( . . . ).” More recently, Douglass North (1990) 34-35 has stressed the importance of third-party enforcement of contracts as a key factor in the development of markets: “Third-party enforcement means the development of the state as a coercive force able to monitor property rights and enforce contracts effectively.”

            Despite their importance for economic growth, little attention has been paid to the role of contracts in the economy of ancient Greece. For instance, the index to Finley’s The Ancient Economy has no entry for “contract” and no discussion of the subject. It should come as no surprise that by contrast there are thirteen entries under “status, and economic activity” covering about seventeen pages, over one tenth of the book. In the recent Cambridge Economic History of the Ancient World there is a single entry for “contracts, building/craft” but only one page reference and no general discussion of the role of contracts and third-party enforcement. Recent collections of essays on the economy of Ancient Greece do not contain any essays on the role of contracts in market-relations (e.g. Manning and Morris [2005], Archibald, Davies and Gabrielsen [2011]).

            This paper will examine the nature of market exchange in Classical Athens through a study of several speeches in the Attic Orators and attempt to answer the questions: Was it based on status or contract? Which of the three forms of exchange according to North was the predominant form of exchange in Classical Athens?  The essay will begin with a brief review of the various kinds of contracts found in Athenian law and brief criticism of Wolff’s views about Greek contracts in Greek Law. The main part of the paper will examine the exchange relationships described in three speeches from the demosthenic corpus: Against Pantaenetus (Dem. 37), Against Timotheus ([Dem.] 49), and Against Dionysodorus ([Dem.] 56).  For each speech the following questions will be asked: What is the relationship between the various parties involved in the dispute? Are they friends, relatives, neighbors or linked through a religious or political organization? Are the ties that bind the parties based on repeat dealings, friendship or a contractual agreement?  To what extent do the parties rely on social pressure or on third-party enforcement?  Were eranos loans typical (e.g. Millett [1991]) or were most loans interest-bearing and secured by legal agreements? The talk will end with a brief analysis of several leases of land in Athens and other Greek poleis drawing on the recent collection of Pernin (2014), which has yet to be exploited by historians of the ancient economy. An analysis of this evidence will show that the statements of Athenian litigants ([Dem.] 34.50-52; 56.2, 48-50) regarding the enforcement of contracts as a key factor in economic transactions are broadly correct. 

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Markets and the Ancient Greek Economy

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